The yield of the US 10-year Treasury Note dropped by three basis points since yesterday following Fed Chairman Jerome Powell’s announcement that interest rates appear to be nearing “neutral.”[2] This development reignited bullish sentiment in equities markets as the SPY closed 2.20% higher. The yield on the US 10-year is down to 3.02%, however the yield on the longer term 30-year hasn’t budged. Why are shorter term interest rates more impacted?

I didn’t quite realize the impact Powell’s words would have on short-term rates. I still don’t quite understand why Fed intervention has greater impact on the yields of shorter-term Treasuries (7-10 years).

We are working on building our portfolio around several positive carry trades. Notably, equities which pay a sizeable dividend are quite attractive. We will focus on compounding capital, that is the key here. We’d like to avoid assets with high expense ratios, such as leveraged ETFs.